Law Firm Investigates Strategy as MSTR Drops 7% and STRC Crashes to $73

The New York-based plaintiff firm is soliciting investors who purchased Strategy securities, including MSTR common stock and preferred series STRF, STRC, STRK, and STRD, and incurred losses. No class action has been filed. The investigation targets whether the company “may have issued materially misleading business information to the investing public,” according to a Business Wire press release.

The announcement adds:

“If you purchased Strategy securities you may be entitled to compensation without payment of any out of pocket fees or costs through a contingency fee arrangement. The Rosen Law Firm is preparing a class action seeking recovery of investor losses.”

Stock Hits New Lows

Thursday’s session turned ugly for Strategy investors. MSTR opened at $94.70 and sold off hard, touching an intraday low of $86.41, matching its 52-week low, on volume of roughly 24.8 million shares, more than double the daily average. As of midday, shares traded around $87.36, down 7.29% from Tuesday’s close of $94.22.

The preferred stock fared worse. STRC, Strategy’s Variable Rate Series A Perpetual Stretch Preferred Stock, hit $73.62 intraday before recovering slightly to $77.81, a decline of 3.75% on the session. The stock is designed to maintain a price near its $100 par value through a variable dividend mechanism. At current levels, it is trading roughly 26% below that target.

Bitcoin also weakened on Thursday, falling to around $58,035 at session lows before recovering to the $59,000 range, adding pressure across the Strategy capital structure.

Retail Investors Deeply Exposed

Strategy and Saylor have publicly stated that approximately 80% of STRC is held by retail investors. The company marketed the product through Fidelity’s brokerage platform, hosted live Q&A sessions with retail buyers, and positioned STRC as an accessible high-yield income vehicle paying an initial annualized dividend of roughly 11.5%. CEO Phong Le purchased STRC shares for his own children.

The product drew unusual attention in crypto circles when a farmer’s son posted online that his father was earning 11.5% annually through STRC dividends, describing the monthly payments as unlike any return his father had previously received for simply lending money. The post circulated widely and was covered by multiple crypto outlets, illustrating the breadth of Strategy’s retail pitch.

With STRC now more than 26% below par, that same retail base is absorbing the losses. Some market observers have pointed to retail selling as a contributing factor in the stock’s breakdown from the $100 level.

Historical Context

Strategy, formerly MicroStrategy, has faced regulatory scrutiny before. In 2000, the SEC charged the company and executives, including Saylor, with fraudulent financial reporting tied to revenue recognition. The matter settled with penalties; Saylor did not admit wrongdoing. In 2020, the Strategy founder grew a strong conviction that BTC was the best asset on the planet, despite disregarding it in 2013.

Strategy holds 847,363 BTC as of June 25, acquired at an average price of roughly $75,651 per coin for a total cost of approximately $64.1 billion. This cache is deeply underwater in terms of net value today. The company remains the world’s largest publicly traded corporate bitcoin holder.

What Comes Next

Rosen Law says it is preparing a class action. Investigation notices of this kind are common in volatile sectors and do not guarantee a lawsuit will be filed or that claims will succeed. Allegations remain unproven. Strategy has not issued a public response to the Rosen announcement as of publication. Rosen Law has filed class actions against firms like Black Rock Coffee Bar, Via Transportation, and Roblox Corporation as well.

Investors and analysts will be watching for any actual class action filing, upcoming 8-K or 10-Q disclosures, and whether the company addresses the investigation on its next earnings call.